President Aquino issues EO to rationalize GOCC, GFI board perks

A February 12, 2011 press release by the Department of Budget and Management

Secretary Abad: performance- and capacity-based compensation system established

President Benigno S. Aquino III has issued an executive order rationalizing the compensation received by board members of government-owned and -controlled corporations (GOCCs) and government financial institutions (GFIs).

Budget and Management Secretary Florencio B. Abad saidExecutive Order No. 24, issued on February 10, limits the compensation of board members to per-diems for board meetings and committee meetings and performance-based incentives.

“Board members don’t just sit around. They have to perform as stewards of the people’s interests in these firms. Their compensation should be commensurate with their level of responsibility and accountability, as well as the performance of their firms,” he said.

“As we have regulated board member compensation, we expect to save about P118 million or about 47% of total compensation that they have been receiving annually,” he said.

The EO sets standards on board per-diems depending on the asset size and revenues of GOCCs and GFIs. Board members may only receive a maximum annual per diem equivalent to 24 meetings.

For board members’ attendance in committee meetings, they may receive additional per-diems but only up to 60% of the per-diems they receive for their attendance in full board meetings.

GOCC/GFI Size

Max Per Diem

for Board Meetings

Max Per Diem

for Ctee. Mtgs.

Max Total

per Year

Assets

Revenue

/Diem

/Year

/Mtg.

/Year

A

≥ P100 B

≥ P10 B

40,000

960,000

24,000

576,000

1,536,000

B

≥ P25B & < P100B

≥ P2.5 B & < P10 B

20,000

480,000

12,000

288,000

768,000

C

≥ P5 B & < P25 B

≥ P500 M & < P2.5 B

15,000

360,000

9,000

216,000

576,000

D

≥ P1 B & < P5 B

≥ P100 M & < P500 M

10,000

240,000

6,000

144,000

384,000

E

< P1 B

< P100 M

5,000

120,000

3,000

72,000

192,000

Abad also said the EO allows GOCCs and GFIs to grant performance-based incentives to board members, but contingent upon performance measures agreed-upon with their supervising department, endorsed by the Department of Budget and Management and Department of Finance, and approved by the President.

In line with existing laws and regulations against double compensation, the EO states that board members sitting in an ex-officio capacity—such as Cabinet secretaries and government officials, President of GOCCs or GFIs, and board members of parent GOCCs or GFIs—will not receive these perks.